Good morning, everyone. Mark Schneider here, and welcome to the IAC and Angi, Inc. Second Quarter Earnings Presentation. Joining me today is Joey Levin, CEO of IAC and Chairman of Angi; and Oisin Hanrahan, CEO of Angi. Similar to last quarter, supplemental to our quarterly earnings releases; IAC also has published its quarterly shareholder letter. We will not be reading the shareholder letter on this call. It is currently available on the Investor Relations section of IAC's website. I will shortly turn the call over to Joey to make a few brief introductory remarks, and then we'll open it up for Q&A. Before we get to that, I'd like to remind you that during this presentation, we may discuss our outlook and future performance. These forward-looking statements typically may be preceded by words such as we expect, we believe, we anticipate, or similar such statements. These forward-looking views are subject to risks and uncertainties, and our actual results could differ materially from the views expressed here today. Some of these risks have been set forth in IAC's, and Angi's second quarter press releases and our respective filings with the SEC. We'll also discuss certain non-GAAP measures, which, as a reminder, include adjusted EBITDA, which we'll refer to today as EBITDA for simplicity during this call. I'll refer you to our three press releases, the IAC shareholder letter, and again, to the Investor Relations section of our websites for all comparable GAAP measures and full reconciliations of all material non-GAAP measures. Now let's jump right into it. Joey?

Thank you, Mark. I do want to start by thanking Mark Schneider here who everyone on the call knows very well, because he answers every single one of your emails and phone calls, probably instantly. And you all know he has an encyclopedic knowledge of IAC. He's been here, I think as long as I have maybe even a little bit longer. But he's always been behind the scenes. Today he is on the screen; you get to see his smiling face. So we're lucky to have Mark here. I know there's going to be a lot of important questions today. So we're going to want to get to questions quickly, but I'll just quickly take stock of where we are relative to where we've been. And going into COVID, Match and Vimeo were both still part of IAC. And they are now off on their own doing very well. Fifty or so billion of value off separately and what's left in IAC is lots of small businesses and Angi HomeServices. And when I look across those businesses, every single one of them, I think almost every single one of them is better off coming out of COVID. I don't know if you can quite say coming out of COVID yet, but is better off today than we were going into the pandemic. And that's probably hardest to see at Angi, we're going to talk about Angi a lot today and what we're doing and how we're building that business for the long term. And that's really, I think, quite an accomplishment. It's a testament to the businesses that we have and the people that we have working here. And I'm very grateful for that group of people and what I think we can do from here. So we're excited about the future and would love to talk about what we're doing. And let's start with the questions.

The operator provided instructions to participants on how to ask questions.

Great. So our first question will be from Dan Salmon at BMO.

Hey, great, good morning, everyone. I've got two questions. First, Joey, can you take us another layer deeper on the brand transition impact from both Angie's List to Angi and then it looks like the more significant impact on the HomeAdvisor brand during the quarter? And specifically why did that have such a significant impact on EBITDA? And then second, if you could just spell out a little bit more about the contribution from Total Home roofing in the July growth versus where the organic trends in that business currently, and perhaps just a few high level comments on your reasons for buying this business. Thanks.

Yes, I'll let Oisin and Mark both jump in here. But to answer the first part on the brand consolidation. Number one, I do think it's important to talk about why we did the brand consolidation. We are spending on multiple brands that are obviously inefficient, but also the brand we were generating the most revenue with was not a brand that was ultimately long-term sticky. We've talked about this before: when you talk about the business HomeAdvisor, you talk about the success of HomeAdvisor — it's a leader in the category, it's the best product, most revenue, it's got the most service professionals — and you'd finish that conversation with somebody and they might tell you they mean Angie's List. Now the good news is we own Angie's List too, but the bad news is for all the hundreds of millions or billions of dollars we put into the brand, it was not a sticky brand; it was too generic, it was too literal. There was a brand that we owned that really owned and defined the category, which was Angie's List. Now 'list' as a concept is outdated. And so we had to update that to Angi. That's something we think we can own and define the category; it's a much more ambitious concept than using a literal brand. But practically what happened there are two things. Number one, we updated the AngiesList.com domain to Angi, and so that transition—we've done this multiple times before—is a V-shaped curve. We are seeing that shape: traffic goes down pretty severely, and then it comes back up over time. We've done that at Dotdash across multiple brands. We did that actually when we went from ServiceMagic to HomeAdvisor. So we have seen this; we have sister companies who've done this, and others like Expedia did a big one relatively recently with Vrbo. So this is a relatively well-worn path; it's hard. The thing that, as you point out, we didn't appreciate or we should have appreciated but didn't, was how quickly HomeAdvisor without the brand support would lose audience in search. That has been more severe; we thought it would hang on. As I said in the letter, it's actually reinforcing the decision because that brand just didn't have the stickiness to it. It needed that constant support. I think the spending on a new brand is going to be much stickier and last much longer and be more enduring. But because it didn't have the brand support, the audience we were getting from search fell off more quickly. And that gets to your margin question too, which is that SEO, the organic search traffic that comes in, is very high margin. And so when you lose some of that, then that drops down to the bottom pretty quickly. Oisin, there's a bunch of other stuff in there, including the acquisition and you should jump in on this.

Thanks, Joey. I think you hit the important part, which was we're absolutely committed to where we're going with the Angi brand. The thing that gave us even more confidence was the rate at which HomeAdvisor declined when we stopped spending on it. So the constant investment in the HomeAdvisor brand was propping up organic search; it was propping up SEM; it was propping up a bunch of channels. Once we removed that investment, particularly on TV, and we invested in Angi, we saw a faster degradation than we anticipated. The upside is the shape of the curve we're seeing on brand for new Angi is better than anticipated. So what we're seeing is we're transferring the brand equity from Angie's List over to Angi in terms of how we measure unaided awareness and aided awareness much, much faster than we thought. On a per-dollar-per-point-of-awareness basis, we're performing somewhere between 7x and 10x better on new Angi than we were when we first transitioned from ServiceMagic to HomeAdvisor. So we're really excited about that. Obviously, it had an impact on EBITDA. In terms of the question on Total Home: to zoom out for a second, we've effectively got two businesses inside Angi right now. One is a business where pros pay us to access customers. The other is a business where we pay pros to do work. Given the macro environment, one of them is challenged—pros paying to access customers is challenged right now—while the other, where we pay pros to do work, has huge product-market fit and is performing unbelievably well. You saw the growth rate of about 120% Q2 versus Q2 last year. You saw the July number of about 160% and in terms of the Total Home, or the Angi Roofing acquisition, that contributed to the growth in Angi Services. July would have been flat versus June without the Angi Roofing acquisition. Why we did that: it ties to why we're overall investing in Angi Services—it's a desire to bring on more supply and build a better customer experience. Our pros want growth for their business; our customers want to get the job done. What we've done at Total Home (Angi Roofing) is go deeper into the roofing category and build real expertise to help people get roofing jobs done. Today on Angi, using Total Home / Angi Roofing, we can actually quote the job quickly by materials and dispatch roofers. We don't employ the individuals doing the work; we contract with individual teams, but this allows us to bring on more supply by specializing the work. It's a great category: ~$10,000 average ticket, very high financing attach rates—about 20% of jobs are financed—which lets us go deeper into financing. We can apply technology to price roofing jobs in advance using aerial LIDAR or aerial photography. So it's really bringing the experience to a seamless end-to-end on Angi. We're really excited about where Angi Services is going.

And just a couple things to add: when IAC has done brand consolidations before, such as ServiceMagic to HomeAdvisor almost 10 years ago, that took roughly 16 months before revenue returned to growth following the commencement. Similarly at Dotdash, when we did verticalization several years ago, on average it took about a year for each of those verticals to return to growth. So these things do take time. On the July revenue, as we said in the shareholder letter, we do expect that sort of organic run rate to continue for the next few months—around that 7% we saw in May, June, July—and then you layer on the acquisition. To help people size that acquisition compared to total Angi, it's relatively small; it's a little outside in terms of growth. Remember that this is in our Angi Services bucket, which recognizes revenue at gross. These are $10,000-plus jobs, and seasonally the summer months for roofing are very strong. And with that, we'll go to our next question from John Blackledge.

Great, thanks, couple questions Dotdash. The revenue and EBITDA growth was strong again in second quarter, could you discuss the quarter and then we saw the top line decelerate in July, if you can, Joey, maybe offer a view on Dotdash second half growth and any color on the longer-term growth vectors for that segment. And then just two other quick ones: Care.com—any update on the progress there since the acquisition, thoughts about the longer-term opportunity and curious when we might start to hear more about that segment more regularly? And then just any update on the CFO search would be great. Thank you.

Sure. Thanks John. On the CFO search: we have a great pipeline of candidates. Glenn was an exceptional CFO and there are big shoes to fill. We have a high standard and flexibility on timing. We have a fantastic finance staff built over many years—Mark Schneider, a Head of Accounting who's exceptional, a Head of Treasury who's exceptional, internal audit and tax leadership. I'm confident the finance functions are running smoothly and will continue to be. We'll find the right person to add value on capital deployment and as a real value add on the executive team. On Care.com: breaking it out isn't necessarily the next step—when we think about businesses we often put them in emerging for a while and then graduate them into segments and potentially into standalone businesses. Right now the business is doing very well. The enterprise business has been the most pleasant surprise since we acquired it and is a meaningful contributor to growth. Employers increasingly see the need to help employees with childcare; there's a clear correlation between that support and diversity in the workforce, which is important. That's a tailwind for the enterprise side. The core consumer business is growing faster—the fastest since we've owned it—and we have improved conversion and retention. Those boost LTV and enable more marketing spend, creating a virtuous cycle. Senior care is also an important and growing component with demographic tailwinds: aging population, desire to age in place, and COVID's negative effect on the perception of nursing homes. We're doing very well, and we're excited, but not in a rush to break it out as its own segment; product development will be the biggest driver. Dotdash: it is doing very well; exceptional quarter but we expected deceleration in the back half. For context, display advertising in Q2 2018 was down year-over-year and then recovered in 2020—so comps vary across quarters. The business is exiting COVID at a faster growth rate on a higher base, which is fantastic. We'll keep investing in content—content investments are up about 50% year-over-year—and that is our competitive advantage. I hope to continue to grow content faster than revenue for a while. Underlying trends independent of the pandemic are favorable: privacy and data tracking changes mean advertisers increasingly value contextual, content-driven audiences. Dotdash sells to advertisers readers who are actively seeking information; advertisers don't need personally identifiable data to reach that audience. We see strong advertiser retention: the Top 25 advertisers are spending significantly more now than in 2019 or 2020. In terms of long-term growth, I like to think of Dotdash as growing north of 20% and I see content investment, ad efficiency, and deeper vertical monetization as drivers.

I'll add a little bit just on the second half expectation. We think north of 20% is a reasonable way to think about Dotdash. Some data points: in the last 12 quarters, Dotdash has gone over 20% in ten of them, six of the last nine quarters were over 30%, and 13 straight months over 20%. For margins: 2020 had a pull forward in margins as many businesses. Margins were 31% last year, up from 24% in 2019. This year we're leaning back into content; content expense investment is expected to grow around 50% year-over-year. Expect some contraction in margins over the back half of the year as we lean into content. For the full year, we should be relatively flat around that 31%, but getting there requires some contraction over the back half. Our next question will be from Cory Carpenter of JPMorgan.

Hey. Thanks for the question. Good to see you on here, Mark. So on Angi Services, how do you think about the sustainability of recent growth and what will continue to drive further penetration? And, Oisin, maybe if you could talk a bit about some of the progress you've made on your product initiatives and Angi Key, HomeAdvisor pay, and consumer financing. Thanks.

Thanks, Cory. On Angi Services: the growth accelerator to $73 million in Q2 reflects three different components inside Angi Services. One is our retail business where we partner with large retailers to sell in-store or online—in other words, you buy furniture and we sell furniture assembly alongside the furniture. The second part is the Book Now business where you come to Angi, make an instant booking, fully pay, and we show up and do the work. The third part is managed services or managed projects where we give you an initial quote online, you put down a small deposit, and then we organize to complete the job by phone and you pay for the job completely; average ticket on that is closer to $7,000–$10,000. All three are growing significantly. The levers differ by component. We're really only scratching the surface on Book Now and managed projects. Early read shows NPS is really strong for both homeowners and pros, with significant pro engagement and customer engagement. At the category level, we've identified about 10 categories where we think we could build a $0.5 billion business in each category—for example, roofing is a $45 billion US category. Levers for future growth are verticalization—going deeper into each category. In Book Now we've started to build category teams, with about a half dozen nearly fully staffed category managers. Product work to improve the experience includes better job pricing and more accurate customer requests, which improves completed jobs, pro repeat rate, and retention. For managed projects, we're deep in roofing to start and also in fencing. Regarding Angi Key and payments: payments scaled to about $26 million in Q2, ~70% quarter-over-quarter growth from Q1 to Q2. Payments hit $3 million in a week in July. When we complete payment processing, we know for certain the job was fulfilled and the pro got paid—so payments deepen the relationship with the customer and pro. We continue rolling payments out across the pro base. Financing is early but tripled in volume Q1 to Q2 on small numbers; roofing helps deepen financing. Angi Key has grown to about 140,000 members at a $29 price point. It is still early; there's much more we can do for value-add: education, elevated services, preferential financing rates for members, and other home-related services. The long-term vision for Angi is a single brand where most people are members, use our mobile app, and turn to Angi for everything in their home—services, Angi Key, payments, and marketplace—all fitting together.

I just have one small addition to Oisin's point. In that world he describes, what's important is that you go to Angi first because it's faster, easier, reliable, delivers the service and does so at a fair price. If you go there first it should make more sense than going anywhere else first, because Angi will be more efficient and reliable. Setting up that infrastructure to make Angi the logical first choice is significant groundwork we're laying right now.

Exactly. You go there first for discretionary things and urgent things. Because you have a relationship with us, because we know your home, we can anticipate and take care of background maintenance. We can proactively prompt homeowners—"would you like gutter cleaning at this time of year?"—or automate seasonal tasks like sprinkler blowouts. That improves economics: angles like zero-accept rate customer PSP retention. The more we bypass paid demand channels and take customers directly into the Angi ecosystem, the better the customer experience and the better the business.

So our next question will be from Brent Thill at Jefferies.

Thanks Joey, a lot of questions around capital allocation—$3.5 billion on the balance sheet. No buyback on IAC for a while; can you just give us your perspective on where the stock is at relative to the activity you want to do on the core side of the business?

Sure. At IAC it's a little under $3 billion. Priorities remain the same: we will prioritize our existing businesses for M&A. Dotdash and publishing remain priorities because the team has proven ability to do acquisitions, integrate them, and add scalable value. Adding to those businesses if good opportunities exist is a priority. All existing businesses are prioritized over brand-new businesses for acquisitions. We will continue to hunt for new categories where we have a unique angle, looking for businesses that generate real cash flow and where we can add value—those are a priority. Share repurchases are always in the consideration set and are effectively buying more of our existing businesses. That's something we always consider. On the Angi side, same story for share repurchases and acquisitions—Angi is unlikely to buy a completely new type of business with capital, but will look to do tuck-in acquisitions like Roofing One (Total Home) and consider share repurchases where appropriate.

So our next question will be from Jason Helfstein at Oppenheimer.

Thanks. I just want to dig a bit deeper into Angi: how much are you willing to draw a line in the sand to hold revenue growth, let's say 7% to 10% for the foreseeable future, given that the headwinds you're facing at HomeAdvisor from a traffic standpoint will take time? Obviously, it's a balance—help us understand how bad it can get over the next several quarters. Thanks.

I'll start and then Oisin will jump in. We're not holding any arbitrary lines; it would be impractical to commit to a fixed revenue growth band like 7%–10% regardless of circumstances. Right now, that's what we're seeing on the organic side and, with the acquisition, that's what we're seeing overall. We don't see a reason why it should be materially worse than that, but we're in a very volatile environment for multiple reasons. There are ongoing pandemic-related ups and downs in people's willingness and ability to do work, and we've introduced our own volatility with the brand transition. Some components are out of our control. We know what we're seeing today and the general direction of various pieces—not all are moving the same way. We've made assumptions, but things can change positively or negatively. We'll remain responsive.

I'd echo Joey. We know the destination we want: we're building the right long-term product. Right now we have two lines inside Angi performing very differently because of the macro environment and the brand. The services business has fantastic product-market fit and is growing rapidly, though it's a smaller part of the business. The leads business is challenged both by the brand transition and by the pandemic. We believe the brand impact is temporary and we'll be stronger on the other side. We hope the pandemic effects are also temporary. We're focused on long-term outcomes, not arbitrary short-term lines. We're also making significant product investments in the lead business to improve the product and experience for pros. We have a pricing test in a small number of markets that changes the ROI equation for pros—very early results are broadly positive. We're investing in payments to close the loop; pros using payments show significantly higher retention and engagement. We're pursuing verticalization, building category-specific salesforces to improve ROI for pros. An onboarding program for ad SPs has yielded strong win rates and 90-day retention. Overall, we're focused on making the ad/lead business higher ROI for pros and expanding our own supply via Angi Services. We're not focused on holding a line in a particular place; we want to make the right long-term decisions for homeowners, pros, and the business.

Our next question will be from Ross Sandler at Barclays.

Thanks Mark. Welcome to the call. Joey, looking past Care.com and Mosaic: what are the next set of brands you're most excited about in that emerging group? What's the bulk case on those up-and-coming brands? And going back to Investopedia—given the huge uptick we've seen and interest around retail trading and crypto—can you do more to tap into that retail trading group? Are there other things you can do beyond how-to videos and definitions? And is Investopedia a material part of Dotdash at this point—where does it stand relative to the roughly $300 million you're going to do in that segment this year?

Sure. In emerging, the next tier after Care and Mosaic is what we call the Future of Work. We have two businesses there—Bluecrew and Vivian (formerly NurseFly). The concept is matching employers with employees can be done meaningfully better with software, particularly where qualifications are binary. Traditional resumes and interviews often have limited value for these roles; software and data—predictable attributes like showing up, lifting requirements, or operating a machine—can be more valuable. Customers who start using our solutions in these categories tend to love them and see the difference immediately, which leads to high growth rates. However, they are not yet proven at scale: they're still expensive to deliver and currently net negative from a GAAP perspective as we invest in them. Each sits in a multi-hundred-billion-dollar category with incumbents but plenty of room for competition. We've seen others raise significant capital in this space, which is good for category education and innovation. These businesses are very small today but promising. Another area is our incubator, NewCo. We're building new businesses there; two have products in the market being tested. Going forward we'll focus NewCo on businesses that use blockchain to build customer experiences. Our work indicates blockchain can transform many categories by making marketplace interactions more efficient. Historically, we ran an incubator focused on mobile (Hatch) that produced Tinder; NewCo will focus on similar early-mover opportunity around blockchain. On Investopedia: Dotdash has four big segments—finance, health, lifestyle, and beauty; finance, health, and lifestyle are roughly equivalent in scale, beauty a bit smaller. Investopedia benefits from trends like retail investor interest; similar deepening can be done across other verticals. We can go deeper, deliver better product experiences, and provide highly qualified advertising opportunities to advertisers—in short, there is more to do across Investopedia and other verticals to monetize relevant trends.

Our next question will be from Justin Patterson at KeyBanc.

Great, thank you. One for Joey and one for Oisin. Joey on Care.com: it's been a unique period with some tailwinds in enterprise and some headwinds elsewhere. How should we think about what normal growth should look like coming forward and the investment level to support that? Then, Oisin, on the rebrand from the pros' perspective: how were they reacting to the new brands with traffic adversely affected? How are you ensuring that we don't have a new capacity problem for them? Thank you.

Thanks Justin. Care.com saw enterprise tailwinds and consumer headwinds, but consumer demand is returning; we see new subscriber records. The business is profitable today and we believe it can remain profitable while investing in the product. The TAM is large—Mark can add more on that—but the business is early-stage and we can invest while maintaining profitability.

Sure. We're early in our ownership of Care.com; the TAM is about $300 billion and penetration today is under 1%, so there's a long runway. Marketplace businesses can often grow north of 20% and that is a potential long-term number, but we're not near where we want to be in penetration, product, and investment. It's hard to give long-term revenue and margin targets now given the earlier stage; you can look at other marketplace businesses for comparables.

I'll hit the rebrand. We started the rebrand by moving Angie's List to Angi for both ad pros and Angie's List customers. More recently, in the last month and a half, we flipped HomeAdvisor to Angi Leads for pros. Pros' sentiment toward Angi is better than toward HomeAdvisor—that's a net win. We've also reduced friction: pros who overlap across Angi Ads and Angi Leads now have a dedicated single point of contact to manage both accounts, which is a step forward. There's opportunity to integrate salesforces and products more tightly—today there are still two distinct accounts and sets of leads, but with the brand alignment there's opportunity to integrate more closely and ultimately give pros access to Angi Services jobs as well. We're making product changes to improve ROI and retention—better pricing, better onboarding, and more integrated product experiences. SP retention is a significant lever; if we improve pricing, brand connection, and product we can see upside. We know it's the right thing to do and the team is making progress; I'm impatient but confident in the work being done.

Our next question will be from Brian Fitzgerald at Wells Fargo.

Thanks, guys—maybe two quick ones. With respect to the rebranding effort, maybe from an SEM/SEO perspective: as we reopen, there's been heightened demand for bottom-of-funnel performance ad formats to get ahead of that resurgent consumer spend. Was that impacting the speed or the efficacy with which you guys rolled out your brand transition playbook? And then second one on Angi Key: 50% of new customers opting in and getting a discount on the first job is a great deal—what's the impact on repeat rates? How are repeat rates performing versus what you thought they would going into the Key rollout?

I'll take the Angi Key question and then touch on SEM/SEO. On Key: we released data in segments comparing service request customers, service request customers who are Key members, and Key members who use the app and start with services. With 140,000 members now, the first data showed significant outperformance—it's slightly degraded but still very strong. The delta is about 3x between someone who downloads the mobile app, engages with Angi Key, and has a booking versus the opposite end of the spectrum. That's a 3x delta, which is really strong. We'll continue to roll Key out to scale. It's early in terms of profit and we are still pay-to-save. Key should be the beginning of a relationship around managing a homeowner's needs; because they've invested in the membership, we can invest in them and get to know their home and offer more services. On SEM/SEO: we've seen more volatility with algorithm updates on SEO which impacts SEM strategy. As we took dollars out of HomeAdvisor TV and pushed into Angi, click-through rates changed. We're focused on deploying spend where it creates the best outcomes for the long term.

On SEM specifically: I may not fully understand the angle but one factor was that timing the brand transition when there was less supply due to the pro supply crunch made it somewhat more convenient—less impactful on business overall. Generally, the cost of SEM across categories tends to rise over time; as market concentration in search persists, prices go up and that gets passed through. Advertisers and platforms will adjust and ultimately some of that cost can get passed to customers. That's the reality of this marketplace.

So I think we have time for one more quick one. Let's go to Nick Jones from Citi.

Great, thanks for taking the questions. One quick one given the uncertainty around the Delta variant: how are you thinking about the risks going into the rest of the year if people pull back from letting people into their home? And second on Angi Key: is this driving more proactive requests in its early days?

Yes. It's hard to predict the impact of the Delta variant. What we've observed is that when people are spending more time in their homes, they tend to spend more on their homes—that's been a boon for the services side. Supply is challenged, but we hope the supply-demand imbalance eases over the next few quarters. On Angi Key: yes, we are seeing increased bookings and service requests incrementally from new Key members. That effect is amplified when homeowners download the mobile app, which is an important push for the rest of the year and into 2022—we want to increase the share of homeowners who are Key members with the mobile app.

All right, we've run over time here. Really appreciate everyone's spending their morning with us. Look forward to talking to you next quarter. Thanks.